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Should hospitals be free to expand?

In Senate Republicans have their way, Washington state could take a leap into deregulation of health care.
Sen. Randi Becker (upper left)

Sen. Randi Becker (upper left) John Stang

Sen. Don Benton

Sen. Don Benton John Stang

Two bills would make it easier for new hospitals and health care facilities to pop up — or existing ones to expand.

Would that be good or bad? Depends on your point of view.

Sen. Don Benton, R-Vancouver has introduced a bill that would remove the requirement for a certificate of need to build or expand any health care facility other than a hospital. Meanwhile, Sen. Randi Becker, R-Eatonville, has submitted another bill to eliminate the same requirement for public hospitals.

A Tuesday public hearing before the Senate Health Care Committee, chaired by Becker, showed mixed feelings about both bills.

The state requires that a new or expanding health facility, including public hospitals, show that their new services are needed in a community. The idea is to ensure that empty hospital beds or underused facilities don't materialize and continue to sit vacant. Once a facility justifies its move or expansion, the state issues a certificate of need.

Benton said, "It seems to met hat this is an artificial impediment, an artificial barrier to entry. ... It seems to me that the free market would determine if new health care services are needed. Most companies are not going to invest millions and millions of dollars without market research."

Committee member Sen. Nathan Schlicher, D-Gig Harbor, said: "Does it make sense to blow up the system completely?" He said the system could use fix-it work without eliminating it.

"We're opposed to opening  the floodgates to immediate growth," sad Doris Visaya, representing the Home Care Association of Washington. She and Greg Pang, CEO of Community Home, Health and Hospice of Longview contended that such rapid expansion would overtax the state regulators' abilities to perform their watchdog functions, saying that states without certificate of need programs are more likely to see Medicare and Medicaid fraud.

"A certificate of need is a good protection against fraud and abuse," Pang said

However, supporters of Benton's and Becker's bills said the certificates have evolved from their original functions and come to hamper hospitals and health care facilities."It has morphed into a franchise system to keep competition out," said Carl Nelson, representing the Washington State Medical Association.

Bill backers criticized the $100,000 initial costs to apply for such a certificate, plus the hundreds of thousands of dollars spent if two operations contest each other's right to the same area.

Rodger McCollum, representing King County Public Hospital District No. 4 in Snoqualmie, and Glen Marshall, representing Kennewick General Hospital, said each has sunk $1 million in obaining certificates of need for projects. Kennewick General has been involved in a turf war with the neighboring private hospital in Richland — with the Richland hospital arguing that Kennewick General should not expand. Marshall said that has led to nine ceritificate of need legal actions.

MultiCare Health System, which operates Mary Bridge Children's Hospital, Tacoma General and other centers and clinics in Pierce, south King, Kitsap and Thurston counties, took a different view. "We've had good experiences and bad experiences with certificates of need," said Jeff Gombosky, representing MultiCare Health System. He argued that the bills' proposals  are "premature" at this time.

John Stang covers state government for Crosscut. He can be reached by writing editor@crosscut.com.


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Comments:

Posted Wed, Jan 30, 8:14 a.m. Inappropriate

Who is expected to pay to keep these new facilities open? Or will a new use for under-used hospitals be part of these proposals?

Amaliada

Posted Wed, Jan 30, 10:30 a.m. Inappropriate

The suggestion that market research will prevent over expansion is completely bogus. The health care industry frequently cries that it is struggling financially. Expansion is driven by hope that more rooms, the ability to perform new procedures will bring in the cash. The certificate of need process reins in the unfounded optimists and empire builders. We already have a budding disaster on our hands to be in any way shape or form to be associated with doctors or practice groups (ER and Hospitalists excepted). The press should be reviewing and printing the identities of donors to the campaigns of the legislative sponsors of these measures.

bartlet

Posted Wed, Jan 30, 10:35 a.m. Inappropriate

Oops. Should have said: We already have a budding disaster on our hands by allowing hospitals to be in any way shape or form associated with doctors or practice groups.

bartlet

Posted Wed, Jan 30, 12:25 p.m. Inappropriate

This, especially Sen. Becker's bill, seems suspicously like a Valley Medical Center backed effort to expand after failing to win approval of a recent certificate of need application to add beds. Valley appealed MultiCare's successful certificate application, which undoubtedly added significantly to the cost of its project to build a new hospital in Covington. This comes after Valley, a public hospital, got trounced in an election several years ago when seeking to expand it authority to collect taxes from a broader area of East King County. Valley's empire building is exactly why the certificate of need process is necessary, particularly for public hospitals that collect taxes from residents of hospital districts.

Mr. V

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